Mississippi tries to balance utility worries in solar power rules

December 4, 2015

By Jeff Amy, Associated Press

JACKSON, Miss. (AP) — The sun will rise on residential solar panels in Mississippi, but it's unclear how bright their future will be.

State utility regulators voted Thursday to adopt a net metering rule smoothing the way for people to generate solar electricity. But the ruling backtracked from an earlier proposal that would have required utilities to pay the same amount for excess energy as what utilities charge customers. Instead, customers will get something in between the wholesale cost of power paid by utilities and the retail rates that they charge customers.

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The move nods to utility pushback nationwide against solar generation, adopting a rate structure advocated by Entergy Corp.'s Mississippi unit, the state's largest private utility. That's even though a study commissioned by the Mississippi Public Service Commission found that financial benefits of solar generation outweighed costs, in part because it means utilities would have to spend less on transmission and new power plants, and less power would be lost in transmission.

As in other states, Mississippi utilities say those who make excess energy from the sun end up escaping their fair share of costs for maintaining the electrical grid, shifting costs onto remaining non-solar customers. That mounting concern in recent weeks led to a halt in new solar installations in Louisiana and a price structure for new solar customers in Hawaii that bears some similarity to Mississippi. As many as two dozen other states are considering changes that would shift more grid costs to solar customers.

"There's concern about cross-subsidization. There's no doubt about that," said Northern District Commissioner Brandon Presley, the strongest supporter of solar power on the three-member regulatory body.

Supporters of solar generation all agreed that Mississippi has made progress in becoming the 46th state to adopt rules promoting solar power. But Jeffrey Cantin, president of the Gulf States Renewable Energy Industries Association, said he was disappointed that commissioners had listened to utility concerns and discarded a large number of public comments supporting the original proposal.

"It's somewhat disappointing for anybody who was looking for a real solid move," Cantin said. "They did pass a rule that made incremental progress."

One innovative feature of Mississippi's rules is that the first 1,000 low-income customers who sign up will get an extra price subsidy.

The commission plans to study the costs and benefits of solar generation in Mississippi in three years, which could lead to pricing adjustments, and plans to reopen the entire matter in five years.

"It's a good start and if it needs tweaking, the door is open to that," said Mississippi Sierra Club Director Louie Miller, who was more positive than Cantin.

Mississippi's rules exclude customers who get power from the federal Tennessee Valley Authority, which has its own net metering program. Non-TVA cooperatives have an extra nine months to propose their own rules to the commission or adopt the rules imposed Thursday on Entergy and Mississippi Power Co. Statewide, cooperatives provide power to more customers than the two private utilities combined, but they deny the commission's claims that it has the legal power to impose solar net metering rules.

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Follow Jeff Amy at: http://twitter.com/jeffamy. His work can be found at http://bigstory.ap.org/author/jeff-amy

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